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Fox Corp. (FOXA) Q3 Earnings Top Estimates, Revenues Rise Y/Y
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Fox Corporation (FOXA - Free Report) reported third-quarter fiscal 2020 adjusted earnings of 93 cents per share that beat the Zacks Consensus Estimate by 29.2% and increased 22.4% year over year.
Revenues were up 25% year over year to $3.44 billion. The figure also surpassed the consensus mark by 2.5%.
Affiliate fees (45.3% of revenues) grew 9.8% to $1.55 billion. Advertising (45.6% of revenues) revenues increased 44.3% to $1.57 billion.
Other revenues (9% of revenues) rose 27.5% from the year-ago quarter to $11 million, driven by higher revenues from the operations of FOX Studios Lot for third parties.
Notably, Fox became a standalone, publicly-traded company on Mar 21, 2019, following the merger of Disney and Twenty-First Century Fox, Inc.
The standalone Fox’s portfolio comprises Twenty-First Century Fox’s news, sports and broadcast businesses. These include FOX News, FOX Business, FOX Broadcasting Company (the FOX Network), FOX Sports, FOX Television Stations Group, sports cable networks like FS1, FS2, FOX Deportes and Big Ten Network, and certain other assets.
Cable Network Programming (42.6% of revenues) revenues increased 6.1% year over year to $1.46 billion. While revenues from Affiliate fees grew 3.9% year over year, advertising revenues grew 10.1% driven by stronger ratings and higher digital advertising revenues at FOX News Media.
Affiliate revenues benefited from contractual price increases, offset by net subscriber declines.
Other revenues improved 12.9% on a year-over-year basis, driven by higher revenues generated from pay-per-view boxing and increased sports sublicensing revenues.
Television (56% of revenues) revenues rose 40.6% from the year-ago quarter to $1.92 billion. Advertising, affiliate fees and other revenues grew 55.9%, 22.3% and 0.9%, respectively.
Affiliate revenues improved on increased programming fees from third-party FOX affiliates and higher average rates per subscriber for the company’s owned and operated stations.
Advertising revenues benefited from the broadcast of Super Bowl LIV, partially offset by the impact of one less NFL Divisional playoff game compared to the prior-year quarter. Also contributing to the increase in advertising revenues was higher cyclical political revenues at FOX Television Stations, partially offset by a decline in the local advertising market as a result of the coronavirus outbreak.
Operating Details
In third-quarter fiscal 2020, operating expenses increased 24.2% year over year to $2.06 billion. As a percentage of revenues, operating expenses contracted 40 basis points (bps) to 59.9%.
Selling, general & administrative (SG&A) expenses surged 38.1% on a year-over-year basis to $464 million. As a percentage of revenues, SG&A expenses expanded 130 bps to 13.5%.
The year-over-year increase in SG&A expenses was primarily attributed to higher costs related to FOX operating as a standalone public company.
Segment EBITDA increased 20.1% year over year to $920 million. EBITDA margin contracted 110 bps on a year-over-year basis to 26.7%.
Cable Network Programming EBITDA improved 6.9% to $792 million. EBITDA margin grew 40 bps to 54%.
Television EBITDA improved 123.6% to $224 million. EBITDA margin grew 440 bps to 11.6%.
Balance Sheet
As of Mar 31, 2020, Fox had $3.19 billion in cash and cash equivalents compared with $31.99 billion as of Dec 31, 2019.
Long-term debt as of Mar 31, 2020 was $6.75 billion, unchanged from the figure reported on Dec 31, 2019.
Zacks Rank & Stocks to Consider
Fox currently carries a Zacks Rank #3 (Hold).
Electronic Arts (EA - Free Report) , Activision Blizzard and Netflix Inc. (NFLX - Free Report) are some better-ranked stocks in the broader Consumer & Discretionary sector. Electronic Arts sports a Zacks Rank #1 (Strong Buy) while Activision Blizzard and Netflix carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term earnings growth rate for Electronic Arts, Activision Blizzard and Netflix is 8.1%, 12.2% and 30%, respectively.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Fox Corp. (FOXA) Q3 Earnings Top Estimates, Revenues Rise Y/Y
Fox Corporation (FOXA - Free Report) reported third-quarter fiscal 2020 adjusted earnings of 93 cents per share that beat the Zacks Consensus Estimate by 29.2% and increased 22.4% year over year.
Revenues were up 25% year over year to $3.44 billion. The figure also surpassed the consensus mark by 2.5%.
Affiliate fees (45.3% of revenues) grew 9.8% to $1.55 billion. Advertising (45.6% of revenues) revenues increased 44.3% to $1.57 billion.
Other revenues (9% of revenues) rose 27.5% from the year-ago quarter to $11 million, driven by higher revenues from the operations of FOX Studios Lot for third parties.
Notably, Fox became a standalone, publicly-traded company on Mar 21, 2019, following the merger of Disney and Twenty-First Century Fox, Inc.
The standalone Fox’s portfolio comprises Twenty-First Century Fox’s news, sports and broadcast businesses. These include FOX News, FOX Business, FOX Broadcasting Company (the FOX Network), FOX Sports, FOX Television Stations Group, sports cable networks like FS1, FS2, FOX Deportes and Big Ten Network, and certain other assets.
Fox Corporation Price, Consensus and EPS Surprise
Fox Corporation price-consensus-eps-surprise-chart | Fox Corporation Quote
Top-Line Details
Cable Network Programming (42.6% of revenues) revenues increased 6.1% year over year to $1.46 billion. While revenues from Affiliate fees grew 3.9% year over year, advertising revenues grew 10.1% driven by stronger ratings and higher digital advertising revenues at FOX News Media.
Affiliate revenues benefited from contractual price increases, offset by net subscriber declines.
Other revenues improved 12.9% on a year-over-year basis, driven by higher revenues generated from pay-per-view boxing and increased sports sublicensing revenues.
Television (56% of revenues) revenues rose 40.6% from the year-ago quarter to $1.92 billion. Advertising, affiliate fees and other revenues grew 55.9%, 22.3% and 0.9%, respectively.
Affiliate revenues improved on increased programming fees from third-party FOX affiliates and higher average rates per subscriber for the company’s owned and operated stations.
Advertising revenues benefited from the broadcast of Super Bowl LIV, partially offset by the impact of one less NFL Divisional playoff game compared to the prior-year quarter. Also contributing to the increase in advertising revenues was higher cyclical political revenues at FOX Television Stations, partially offset by a decline in the local advertising market as a result of the coronavirus outbreak.
Operating Details
In third-quarter fiscal 2020, operating expenses increased 24.2% year over year to $2.06 billion. As a percentage of revenues, operating expenses contracted 40 basis points (bps) to 59.9%.
Selling, general & administrative (SG&A) expenses surged 38.1% on a year-over-year basis to $464 million. As a percentage of revenues, SG&A expenses expanded 130 bps to 13.5%.
The year-over-year increase in SG&A expenses was primarily attributed to higher costs related to FOX operating as a standalone public company.
Segment EBITDA increased 20.1% year over year to $920 million. EBITDA margin contracted 110 bps on a year-over-year basis to 26.7%.
Cable Network Programming EBITDA improved 6.9% to $792 million. EBITDA margin grew 40 bps to 54%.
Television EBITDA improved 123.6% to $224 million. EBITDA margin grew 440 bps to 11.6%.
Balance Sheet
As of Mar 31, 2020, Fox had $3.19 billion in cash and cash equivalents compared with $31.99 billion as of Dec 31, 2019.
Long-term debt as of Mar 31, 2020 was $6.75 billion, unchanged from the figure reported on Dec 31, 2019.
Zacks Rank & Stocks to Consider
Fox currently carries a Zacks Rank #3 (Hold).
Electronic Arts (EA - Free Report) , Activision Blizzard and Netflix Inc. (NFLX - Free Report) are some better-ranked stocks in the broader Consumer & Discretionary sector. Electronic Arts sports a Zacks Rank #1 (Strong Buy) while Activision Blizzard and Netflix carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term earnings growth rate for Electronic Arts, Activision Blizzard and Netflix is 8.1%, 12.2% and 30%, respectively.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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